Increasing interest in single malt Scotch, particularly from the US and Europe, is driving investment in maturing stocks, rare bottlings and – on a larger scale – new distillery builds.

It’s an exciting time for the single malt drinker, especially for those who have been concerned that newcomers to Scotch would ‘drink all our whisky’. Give it a few years, and we will never have had more choice of single malt Scotch.

The last time there was a distillery boom of this scale was in the 1890s. Around 40 new distilleries were built in that decade alone to cope with overwhelming demand for malt whisky for use in blends, but by 1912 the same number had closed. Although a major contributor to their decline was the Pattisons’ crash of 1898 – an unfortunate incident of fraud and betrayal that led to the downfall of many distilleries and blenders – there are still many parallels to be drawn between the boom periods of the 1890s and 2010s.

Torabhaig distillery: One of the newest distilleries to open in Scotland this century

In Victorian Britain, blends, which had a softer appeal for more delicate palates, found favour south of the border so that by the mid-1880s it was an established spirit style for grocers and public houses.

Major blending houses opened flagship stores in London, and introduced brand names for their blends, such as White Horse by Mackie & Co, and Pinch by Haig & Haig, for mass appeal. Blends and malts were also sold to grocers who blended and bottled them under their own labels, and in turn set up further outlets in overseas markets. John Walker & Sons established a hub in Sydney in 1887, succeeding in making Old Highland, the precursor to the Johnnie Walker range, the best seller in Australia.

Marketing exploded in a way it never had before. Adverts were placed in periodicals, attractive mirrors, ceramics, miniatures and jugs were produced, all bearing the names of blends, distilleries and whisky companies. In 1897 Dewar’s produced the first advert screened in cinemas, at what must have been a huge cost at the time, and went on to erect the largest mechanical neon sign in Europe on the Thames Embankment in 1911. Quite simply, whisky advertising spend was huge.

Sound familiar? Malt whisky may have been destined for fillings in blends, but the level of investment in the industry was at an unprecedented level, much as it is now. Moss and Hume remark in The Making of Scotch Whisky that: ‘After 1895, when it became clear that real growth, rather than recovery, was taking place, investment in whisky became fashionable.’

Investment in whisky became fashionable. The rise of whisky investment vehicles and auction websites is proof of the same trend recurring more than 120 years on. Everyone wants a slice of the Scotch whisky pie.

Crowdfunded: Phil and Simon Thomson used crowdfunding to finance the build of Dornoch distillery last year

Back then, the majority of new distillery builds eschewed traditional locations on the west coast and Islay in favour of sites in Speyside. The shift reflected the trend in blending – Speyside malts offered a different spectrum of flavours than could be typically found elsewhere in Scotland. Barley from Speyside was also plentiful and exhibited a high yield, while peat and coal were easy to obtain. By the 1890s the local railways were efficiently run, making the transportation of coal cheaper and easier. Speyside distilleries moved from drying their barley with peat to coal, thereby establishing a new regional style.

Note now the locations of many new distilleries being planned in 2017-19: islands with no previous history of legal distilling; the Borders and major cities like Glasgow and Edinburgh where malt distilling has been extinct for several decades; remote farmsteads in the Highlands. Not one of the seven new distilleries planned for 2017 will be in Speyside – all part of a necessity for each to boast its individuality. In a modern market where single malt is becoming crowded, USP has never been more important.

By 1899 the amount of whisky stored in Scotland’s warehouses had grown by more than 575% to 13.5m gallons. The Pattisons’ crash was disastrous, and signalled the end of the boom in malt distilling, the First World War then sealing the fate of many. Malt whisky output fell from a high of 16m gallons in 1898 to 10m gallons just two years later. The industry was arguably heading for a bust anyway, as growing stocks far outweighed the value of whisky at the time.

Will this be where we draw our last parallel? In recent years a decline in Scotch exports led some distilleries to reduce output to regulate their stocks five to 10 years down the line – in 2014 Diageo announced a freeze on its planned £1bn investment in increasing capacity at its distilleries, including shelving a new distillery build at Teaninich and expansion of Clynelish and Mortlach distilleries. A strategy designed to avoid repeating the same mistakes as their Victorian forbears.

Stock management is the lynchpin of Scotch whisky’s success – get it right and value and demand remain happy bedfellows, whereas overproduction in a saturated market could see a repeat of the 1900s crash. It’s all a game of crystal ball-gazing, predicting the popularity of single malt in the future. Unlike the 1890s stills, most of these new builds are aimed at the single malt market, not blends.

An influx of new distilleries may signal greater consumer choice (particularly where flavour experimentation is concerned) and a vibrant, ‘fashionable’ industry to invest in now, but their success hangs on whether the industry can learn from the mistakes of the past.

That said, there are several trump cards modern distilleries have that their Victorian ancestors lacked, including a thriving gin market, whisky tourists, and social media.